Best Crowdfunding Sites for Small Business in 2018

This article shares with you the best crowdfunding sites for small business. We split these into reward crowdfunding and equity crowdfunding as they are very different funding models, which we explain. We also provide you a simple and crisp summary of the pros and cons and fee charges for each site.

If you decide that crowdfunding is not right for your needs, you may want to consider a peer-to-peer loan instead. We recommend Street Shares because they fund early stage businesses, it’s relatively easy to qualify and you can save interest costs by paying your loan back early.

What is Reward Crowdfunding?

Crowdfunding provides you with a great way to raise money from donors. Think friends, family, people loyal to your brand and complete strangers who are all potential donors.

Typically, the best crowdfunding sites for small business connect with donors via social media marketing campaigns. If you do not have the time or resources to create and manage this, it will be more challenging to raise the funds you require. And if you want to reward crowdfund from strangers, you’ll need to consider providing incentives to donors. For example, VIP access, discounts or a free limited-edition version of a new product (or service) you are crowdfunding in return for their donation.

Best Reward Crowdfunding Sites for Small Business

Crowdfunding is a great way for some small business types to raise funds without parting with equity or owing anybody any money. Having researched the market, we have brought together a list of the best options for you to consider. It’s worth reading down the list because some are suited to specific business circumstances.

Launched in 2008, Kickstarter was the first and is still the most popular reward crowdfunding platform for creative projects. To date the platform has raised more that $3.5 billion in pledges from 14 million backers to crowdfund over 139k projects.

If you are looking to crowdfund a film, stage show, comic, video game, book or new tech gadget then Kickstarter is a great place to crowdfund your project.

Fee Charges

Pros

Cons

Kickstarter charge 5% of total funds raised

If funding isn't successful, there re no fees

You have to raise your target in < 60 days

Payment processing costs 3% + $0.20 per pledge

The biggest crowdfunding community for creative projects

Failing to reach your target means writing off a lot of hard work promoting your campaign

Pledges under $10 have a discounted micro-pledge fee of 5% + £0.05 per pledge

Everyone has heard of Kickstarter, which will add a boost to your SM campaign

If you're not a creative business, you're unlikely to meet Kickstarter's requirements

Launched in 2010, GoFundMe is the world’s largest social fundraising platform, with over $5 billion raised so far from a community of over 50 million donors. It currently receives over $140 million in donations every month. That’s more funds then has been raised on any other platform, which says something very good about humanity.

The site allows people to crowdfund events. These events range from funding thank yous to deserving people to the most challenging circumstances like terminal illness. And it’s not just for charitable causes. Small businesses use GoFundMe to raise funds too.

Fee Charges

Pros

Cons

GoFund me charge 5% of all funds raised

GoFundMe is a well recognised brand around the world

It's difficult to think of any

Payment processing costs 3% + 30c per donation

If you are a charity, GoFundMe does not charge any payment processing fees

Founded in 2008, Indiegogo is an international success. One of the first sites to offer reward crowdfunding at scale.

You can crowdsource funds for most creative avenues like film, music and comics. You can also crowdfund mobile tech, audio gadgets, travel and outdoor pursuits, and health and fitness. If you’re an innovator, Indiegogo is a great alternative to Kickstarter.

Founded in 2008, FundRazr is a highly customisable reward crowdfunding site of huge scale with approaching $100 million of projects funded via the platform. You can customise your campaign to reflect your brand and use plugins to make it easy to integrate with social media (like Facebook) to promote your campaign.

The site has been an innovator in cause crowdfunding since its early days and continues to enrich the user-experience. For example, FundRazr was the first crowdfunding platform to offer a collaborative payment model. This allows funds donated to be deposited directly to the cause raising funds. It also provides a service that allows you to attract volunteers for your cause.

Fee Charges

Pros

Cons

FundRazr charges 5-7% of total funds raised. Contributors are given the option to cover fees

Contributors are given the option to cover your fees

Backers will typically come from your own promotional efforts, but their tools help

Payment processing costs 2.9% + $0.30 per donation

Access to your funds right away

Freedom to customise and great plugins to help you promote your campaign

Launched in 2012, Experiment is a great reward crowdfunding site for scientists engaged in research and development. The site focuses on science, medicine, health, mathematics, computer science, ecology and a range of other areas of scientific research.

The backers of an experiment project are rewarded by having a copy of the results of the research project shared with them.

Fee Charges

Pros

Cons

Experiment charges 8% of total funds raised

Identifies and applies grants to projects that attract them

No funding if you do not fully complete your goals

Payment processing costs 2.9% + $0.30 per donation

You retain complete control over your intellectual property

Fees are high compared with other platforms

Specialist community for scientists and acedemics

What is Equity Crowdfunding

If reward crowdfunding is not right for your needs, you could may want to consider equity crowdfunding. Equity crowdfunding platforms bring together a marketplace of potential investors to fund your business in return for an equity stake.

If you are confident that your business is going to be successful, this is probably the most expensive sources of funding. However, if speed to market is a priority, venture backing is a great way to grow fast. And this is why it is popular with service-as-a-software and online marketplace business concepts.

Best Equity Crowdfunding Sites for Small Business

Launched in 2010, RocketHub has rapidly become one of the largest equity crowdfunding platforms for small business. Like other equity crowdfunding sites, RocketHub pre-qualifies small businesses seeking investment in a 72-hour turnaround. RocketHub is partnered with Bankroll Ventures, which helps to connect you to a wide range of early stage investors and a rapidly scaling venture eco-system.

Launched in 2012, Fundable is both a reward and equity crowdfunding platform with over $400 million in funds currently committed on the platform. If your business wants to explore both of these options that Fundable is an obvious place to start.

Fundable is wholly focused on commercial industries ranging from retail to finance, tech to real estate and energy to food. The platform does not raise funds for social or charitable projects.

Fee Charges

Pros

Cons

Fundable charge a flat fee of $179 per month to use the platform for fundraising purposes

Launched in 2012 as reward crowdfunding site for women, Plum Alley has now morphed into an equity crowdfunding site primarily for female entrepreneurs. Plum Alley is not the largest or best known crowdfunding site, but it’s building a great reputation for selecting the right businesses to get behind. It draws them into a vibrant member community of investors and ensures that great businesses get funded.

With a network of more than 200,000 entrepreneurs and investors, Crowdfunder is an equity crowdfunding platform. To date it’s funded more than 100 early stage venture with an average investment of $1.8 million per project.

Like any great equity crowdfunding platform, it has a vibrant community. In this case, over 15,000 investors and 45,000 organisations/companies.

Fee Charges

Pros

Cons

Crowdfunder charge $499 per month to have full access to the platform for fundraising purposes.

Excellent value for money compared with other equity crowdfunding sites.

There are no angel investors for smaller funding needs

Easy to connect with investors and introduce yourself and your business

Launched in 2010, AngelList started out as an online introduction board for tech startups to connect with angel investors . The vision is still to democratize accessing to investors. And since 2015 the site has been allowing startups to raise seed funding from angel investors free of charge. You could argue that its not strictly speaking a crowdfunding site, but you can find thousands of angel investors to connect with all in one place, which is good enough for us.

Fee Charges

Pros

Cons

AngelList does not charge any fees

It's free

Customer service and advice from AngelList is very lean because it is free

You become part of a community where you have access to thousands of angel investors

The Juice Press

In this article, we shared with you the best crowdfunding sites for small business. All of the sites we reviewed are viable options depending on your needs and circumstances. If you want to share your crowdfunding experiences, do get in touch with us through the comments section below.

Reward crowdfunding works well for some businesses and not so well for others. If crowdfunding is not right for your business, a good alternative is a peer-to-peer loan. We recommend Street Shares because they fund new businesses, it’s easy to qualify and you can save loan interest costs by paying your loan back early.

Related Articles

About the Author

Vittorio is a staff writer for SmallbizJuice, specializing in financing including bank loans, angel investing and other sources of small business finance. Over the last 23 years, Vittorio has been a banker, a small business financial director and an angel investor in startups. These days he writes on finance and provides financial advice to several businesses as a small business funding expert. Outside of work, Paul is a keen cook and loves nothing more than to cook Puglian cuisine of course!